A little less Best Buy, a little more Louis Vuitton. While conceptualizing the very first Apple Store, the late Steve Jobs wanted the iPhone maker’s retail experience to evoke luxury flagship stores—much to his peers’ criticism.
In search of guidance, Jobs turned to the king of luxury (and future richest man in the world, for a time): Bernard Arnault.
Up until the turn of the millennium, Apple products were sold at retailers like Sears and CompUSA. Dissatisfied with the customer experience at the big-box stores, Jobs pushed for Apple to open its own stand-alone stores. Jobs asked Arnault, the founder and CEO of LVMH, for his advice on opening Apple Stores in the same areas as Louis Vuitton’s prime retail locations.
“Everybody thought it’s completely crazy to sell Apple products in a shop,” Arnault said in a 2016 interview at the Oxford Union. “I remember at the time, Michael Dell saying it’s completely crazy, it will never work.”
Arnault himself was unsure about the Apple cofounder’s retail vision—but he didn’t hesitate to give him advice. “I must say, I was myself a little doubtful of selling [iPods in shops],” said Arnault, who surpassed Elon Musk as the richest man in the world back in 2022 but now holds the title of third richest. “But it was working.”
In the 2016 interview, Arnault praised Jobs’ long-term vision—a mindset shared by the Frenchman in his quest to bring his heritage houses into the future. Over the course of five decades, Arnault turned a struggling clothing manufacturer into a luxury conglomerate comprising over 75 iconic brands, including Louis Vuitton, Dior, and Sephora.
“What I have in mind every morning is that the desirability of a brand should be as strong in 10 years,” Arnault, who has amassed a personal fortune of $199 billion, told Forbes in 2019.
Manufacturing desire
Part of LVMH’s key to success is capturing something intangible: “The most important word in our business is desire, how to create desire,” Arnault said at the Oxford Union event.
And it’s not as simple as just having top-quality $3,000 handbags and $10,000 watches—or iPods or iPhones, for that matter. “When you have the product, then you have to create good environments in the shops, and you have to present it well,” Arnault said. “Good films if it’s a perfume, good advertisements either in magazines or on the internet if it’s a product.”
Similar to Jobs, Arnault stressed the importance of customer experience. In 2019, amid negotiations to acquire Tiffany & Co., an executive gave Arnault a tour of the luxury jeweler’s flagship store in New York.
“We got lost in the building,” Arnault told the Wall Street Journal last year. “Here is a guy getting lost in his own shop. I said, ‘We have some work to do on this.'”
After LVMH completed its $15.8 billion takeover of Tiffany in 2021, Arnault ordered a complete revamp of the flagship Fifth Avenue location. The Journal estimated that the renovation cost $500 million, citing analysts. Arnault did not confirm or deny the figure.
“You cannot dream when you talk numbers,” he told the Journal. “When you create desire, profits are a consequence.”
And the profits are certainly rolling in: LVMH reported revenue of $93.46 billion in 2023—13% organic growth from the previous year. Arnault’s net worth reached an all-time high of $207.8 billion in January, but it has since contracted to $199 billion, according to the Bloomberg Billionaires Index. Meanwhile, Forbes lists the Arnault family fortune as the world’s largest, at $228.8 billion.
The perfect paradox
Two decades later, Apple Stores revolutionized tech retail as we know it. There are now more than 500 Apple Stores in over 25 countries, each generating between $40 million and $100 million annually, according to Bloomberg.
The Apple of today has much in common with some of LVMH’s flagship brands—long lines, high prices, premium experiences. But according to Arnault, Apple is missing the key “paradox” that defines a luxury brand. “You have to have the combination between modernity and timelessness,” Arnault explained at the Oxford Union.
Arnault remembers asking Jobs a question about the future of Apple: “Do you think, Steve, that your telephone is going to work as successfully in 20 years?” Jobs admitted that he didn’t know, because of the ever-evolving nature of the tech industry.
“That’s the difference between us,” Arnault remembers telling Jobs. “Because my Dom Pérignon, I can guarantee you it will be sold and successful in 20 years.”
